The US property market continues to cool down! Existing home contract sales fell to the lowest level in the year in July. High housing prices and high interest rates continued to suppress demand

The Zhitong Finance App learned that the US real estate market continues to be suppressed by high housing prices and high mortgage interest rates. According to data released by the National Association of Realtors (NAR) on Tuesday, contract sales of existing homes declined further in July, falling to their lowest level since January this year, and close to a record low, indicating that demand in the housing market is still weak.

According to the data, the sales index for existing housing contracts in the US fell 2.3% month-on-month to 71.2 in July, which was not only lower than the market's previous expectations, but also the lowest level since January this year. Since data was recorded in 2001, this reading is tied for the second lowest in history. Unseasonally adjusted data showed that the number of contracts signed in July decreased by 2.5% compared to the same period last year.

NAR chief economist Lawrence Yun said that the highest mortgage interest rate since this year happened to be in the middle of the peak summer home buying season, which directly affected the signing of home purchase contracts. At the same time, housing prices in the US are still at historically high levels, causing listed houses to stay on the market for a longer period of time. The number of buyers willing to bid for a property at a higher price than a year ago is also less than a year ago, but there are still large differences between regions.

Currently, the average interest rate for 30-year fixed mortgage loans in the US is still slightly below the one-year high set at the end of July. On the one hand, high interest rates made many homeowners who locked in low-interest loans during the pandemic unwilling to sell their existing homes. On the other hand, they also significantly increased the cost of home purchases for potential buyers, and continued to put pressure on housing affordability.

Existing home contract sales usually reflect housing that has already signed a purchase contract but has not yet officially completed the transaction. Therefore, it is generally one to two months ahead of the final transaction data, which is regarded as an important indicator for observing future existing home sales trends. The clear decline in July data means that existing home sales in the US may continue to be under pressure in the coming months.

From a regional perspective, housing demand in all four major regions of the US declined in July. Among them, in the southern region, which is the largest residential sales market in the US, the pending sales index fell 2.2% to the lowest level since January 2025; the decline in the western region was even more obvious, falling 4.7% from month to month.

The latest data also echoes the weak performance of the US housing construction market. Another data released by the US government on Tuesday showed a marked decline in new housing starts in July, with single-family housing starts falling to its lowest level since 2022.

Overall, under the double pressure of mortgage interest rates being close to a one-year high and housing prices maintaining record levels, the US real estate market still lacks significant momentum for recovery. Both demand for home purchases and housing construction activities are showing signs of weakness, indicating that high financing costs are still the main constraint facing the current housing market.